- MU
- AMZN
- NVDA
Artificial intelligence (AI) is ushering in significant changes across every sector and industry, and some of the companies at the forefront have already been handsomely rewarded for their efforts, with much more to come. But with more and more companies getting in on AI, which ones are worth investing in?
Perhaps it might help to take some inspiration from successful investors, such as David Tepper, the billionaire founder of the family office Appaloosa Management. Appaloosa has several prominent AI stocks in its public equity portfolio, and two of them, Micron Technology(NASDAQ:MU) and Amazon (NASDAQ:AMZN), account for about 31% of the portfolio. Are these AI stocks worth buying today? Let’s find out.
Missed AI’s “Act 1”? Act 2 Could Be 14x Bigger.Most investors think they missed the AI boat because they didn’t buy Nvidia in 2005. But according to our analysts, we’re only at the end of “Act 1″—the R&D phase. “Act 2” is the global rollout.Continue »
1. Micron Technology
Micron is one of the leaders in providing computer memory and data storage products, such as DRAM (Dynamic Random Access Memory) chips, which are widely used in data centers. The company’s shares have climbed a little more than 200% this year as its financial results have significantly improved. In the fourth quarter of its fiscal year 2026, which ended Sept. 3, Micron’s revenue soared by 379% to $54.2 billion. That was more than it generated during its entire fiscal year 2025.
The company’s non-GAAP gross margin for the period was 87%, substantially higher than the 45.7% reported in the prior-year quarter. Micron’s non-GAAP operating income was $44.6 billion at an 82.3% operating margin, versus $4 billion at 35% in the year-ago period.
And Micron posted non-GAAP earnings per share of $33.42, up 1003% year over year. Micron is flying on all cylinders. But during the second quarter, Appaloosa Management reduced its stake in the stock by about 41%, likely partly to cash in some nice gains. It now accounts for 15.06% of the fund’s public equity portfolio, indicating that Tepper and his team remain bullish on the company’s prospects.
That makes sense. Micron Technology is benefiting from a shortage of memory chips amid the massive AI build-out, which is granting the company significant pricing power. The shortage could continue at least through 2028, according to some projections, and Micron sees significant demand through that year.
Micron’s incredible sales and earnings growth will eventually slow and normalize. But note that the market is arguably already factoring that in. The company is trading at just 7x forward earnings, versus an average of 19.7x for information technology stocks. At current levels, Micron’s shares remain attractive.
